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Italy is on the brink of a dangerous banking crisis as the red-blooded showdown between Brussels and Rome pushes the country’s borrowing costs to a five-year high.

Yields on Italy’s 10-year debt spiked to 3.62pc after the Lega strongman and vice-premier, Matteo Salvini, vowed to sweep away the existing European order. He called Jean-Claude Juncker and his Commission aides "enemies of Europe barricaded inside their Brussels bunker.”

The furious outburst followed the leak of a stern letter from the Commission rejecting the deficit spending plans of the insurgent Lega-Five Star government, and more or less ordering Rome to go back to the drawing board.